Group 1 - The sudden drop in the Beijing Stock Exchange (BSE) stocks, with the BSE 50 index falling nearly 6%, is attributed to overcrowding in micro-cap stocks and significant overbought signals in the market [1][2] - The trading volume of the CSI 2000 has exceeded the high point from March, indicating a potential correction in the market [2] - The liquidity situation shows a contraction in net inflows for margin trading and a significant outflow from equity ETFs, leading to a shrinking demand side [2] Group 2 - The U.S. fiscal deficit is projected at 6.1% for this year, corresponding to approximately $2 trillion, with warnings from Treasury Secretary Yellen about the depletion of government cash and unconventional measures by August [2][3] - The global financial system is facing increased uncertainty due to the U.S. fiscal crisis and rising U.S. debt rates, prompting a shift towards "safe assets" [3] - The Japanese long-term interest rates have risen due to comments from Prime Minister Kishida, which may impact global market risk appetite, although the Bank of Japan may intervene if rates continue to rise significantly [3] Group 3 - A-shares have maintained a volatile trend since the second week of May, with a significant number of stocks declining, yet the Shanghai Composite Index remains strong [4] - Long-term expectations for quality assets in A-shares remain positive, with Morgan Stanley's target for the MSCI China Index set at 80 in a basic scenario and 89 in an optimistic scenario [4] - The Chinese economy's recovery is expected to rely on consumption and investment, with policy support needed to boost consumer spending [5]

Core Viewpoint - The funding mechanism for river works in the Qing Dynasty reflects both the characteristics of traditional water management and the deep-seated contradictions within the feudal fiscal system, ultimately leading to a fiscal crisis that became a core issue in governance [1] Funding Mechanism - The funding for river works primarily relied on central government allocations and local special taxes, with a fixed annual collection system in place, but this design struggled to adapt to dynamic changes in disaster response or project scale [2] - The "compensation system" established during the Yongzheng to Qianlong periods linked project responsibility to economic losses, creating a tiered accountability structure among officials, which unfortunately led to corruption through inflated project reports [2] - The procurement of materials for river works was divided into official and commercial modes, with flexibility in procurement processes providing opportunities for corruption among officials [2] Causes of the Crisis - Systemic corruption severely undermined the effectiveness of river work, with officials engaging in fraudulent practices at various stages, leading to a significant misallocation of funds intended for river management [3] - Rising project costs due to inflation and outdated pricing mechanisms forced officials to inflate expenses, creating a vicious cycle of cost inflation and corruption that deteriorated project quality [3] - Rigid institutional frameworks hindered effective governance, with centralized decision-making processes causing delays and resource misallocation [4] - Fiscal imbalances led to competition for limited resources, resulting in the diversion of funds from river works to military and other expenditures, exacerbating the financial crisis [4] Impact of the Crisis - The fiscal crisis resulted in the collapse of river defense systems and significant social disasters, with the frequency of river breaches increasing dramatically, leading to widespread displacement and suffering among the populace [5][6] - Local governance became paralyzed under increasing fiscal pressure, with local officials resorting to heavy taxation and forced labor to cover funding shortfalls, leading to social unrest and revolts [6] - A crisis of trust emerged as corruption within river management offices eroded the moral authority of the Qing government, revealing the systemic failures of the feudal fiscal system [7]